I ran process monitor on the server while connecting from the workstation as the user, filtering on WMSVC:
Normal
0
false
false
false
EN-US
X-NONE
X-NONE
MicrosoftInternetExplorer4
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-qformat:yes;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin:0in;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri","sans-serif";
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-fareast-font-family:"Times New Roman";
mso-fareast-theme-font:minor-fareast;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:"Times New Roman";
mso-bidi-theme-font:minor-bidi;}
10:36:49.6398753 AM wmsvc.exe 2012 RegOpenKey HKU\S-1-5-21-903162274-1763063872-709122288-9616 NAME NOT FOUND Desired Access: Maximum Allowed
10:36:49.6399220 AM wmsvc.exe 2012 RegOpenKey HKU\.Default ACCESS DENIED Desired
Access: Maximum Allowed
Seems like a new key is trying to be created and that's where the registry permissions are coming into play. this was trying to be created as LOCAL_SERVICE